Australian junior Triangle Energy has failed to gain regulatory approval for a farm-in deal that would have seen it gain a stake in Pilot Energy’s planned Cliff Head renewable energy project in Western Australia.

Pilot confirmed Wednesday an agreement reached in November last year for Triangle to acquire a 78.75% operated interest in Perth basin exploration permit WA-481-P was now off.

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The deal was conditional on approval from Australia’s National Offshore Petroleum Administrator (Nopta) approving the preliminary transfer of an interest from Key Petroleum to Pilot and the transfer of an interest in the permit from Pilot to Triangle

However, Pilot revealed that on 4 January Nopta gave the parties notice it intended to refuse to approve the transfer on the basis that it was not satisfied Triangle had demonstrated sufficient financial resources to meet the obligations associated with WA-481-P.

Under the terms agreed last year, Triangle would have been required to fund the initial A$5.75 million (US$4.1 million) WA-481-P three-year work programme, which includes acquisition and processing of extensive 2D and 3D seismic surveys.

Following the completion of the initial three-year permit term, the joint venture would have been required to carry out well planning activities in year four, with an exploration well commitment due in year five.

“Given the position expressed by Nopta regarding the unlikely approval of the transfer to Triangle and the passing of the cut-off date, Pilot has today advised Triangle in writing that it is terminating the Sale Agreement on the basis that the Conditions have not been satisfied or waived by the cut-off date,” Pilot said in Wednesday’s statement.

Pilot still progressing low-carbon projects

Under the terms of the proposed sale, Pilot and Triangle were also set to form a joint venture exploring the development of a wind and solar renewable energy project, centred around the offshore Cliff Head oilfield and its existing facilities.

Despite the setback, Pilot said Wednesday that it had made “substantial progress” on advancing the feasibility studies for the proposed Mid West Renewable Energy Project, as well as its planned Mid West Blue Hydrogen and Carbon Capture Project.

While Pilot expects to begin releasing the results of those studies over the course of the next eight weeks, it said initial data from the studies had highlighted “significant and high-capacity factor onshore and offshore renewable energy resources”, that could potentially be used for the production of green hydrogen.

It has also helped prove up “the significant carbon capture potential of the WA-481-P permit area”, with the assessment indicating the area immediately outside of the Cliff Head oilfield permit is roughly 10 times larger than the carbon capture potential identified within the oilfield permit.

A prior pre-feasibility study carried out by Pilot and Risc Advisory indicated the Cliff Head oilfield could handle roughly 500,000 tonnes of carbon dioxide per annum over a 13-year period, giving a total storage capacity of 6.5 million tonnes.

Pilot also revealed Wednesday it received “significant interest from other parties” interested in partnering with the company in both the stand-alone wind and solar renewable energy projects and the hydrogen and carbon capture projects.

In November last year, Pilot teamed up with fellow Australian companies APA Group and Warrego Energy to create a consortium to jointly fund and undertake the feasibility study into the proposed Mid West Blue Hydrogen and CCS project.

France’s Technip Energies, along with advisory companies Genesis and Risc, are also acting as “key consultants” on the study.

It also launched a concept study into a potential 1.1-gigawatt ind farm development in WA-481-P in September last year, comprising 78 14-megawatt wind turbines, and combining it with an onshore solar farm to deliver a combined wind and solar project.